Michael Salter and Chris Bryden consider the problems left behind by insolvent employers
It is estimated that every day in the 50 companies go out of business. Beyond the initial impact this will have on employees, who are likely to end up losing their jobs, there may also be a secondary sting in the tail when they find that money they are owed will not be as easy to obtain as they first thought.
Not only may this mean that wage payments due and owing are not made, it may also mean that there are difficulties in obtaining redundancy payments. Further, any claims currently pending in the employment tribunal or county court, or potential claims not yet issued, are likely to be affected by the employer’s insolvency. Various legal avenues exist to provide employees of insolvent employers with at least some recompense.
INSOLVENCY
The Insolvency Act 1986 (IA 1986) provides that an employee’s claim for remuneration— which includes all wages and salary,
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